What is a Secure Data Room?

Secure dataroom is an online collaboration platform that speeds up due diligence, cuts down on timeframes for M&A and deal making, while providing ironclad safety. It allows buy-side as well as sell-side teams to manage the full duration of a transaction from beginning to end with confidence.

What is it that separates a secure dataroom from file-sharing sites such as Dropbox is the fact that it’s more geared toward the enterprise, with the ability for users to be organized and permissions to be granted at granular levels. Analytics can also provide insights into the use of the dataroom (e.g. When, how and where the data is accessible. Some also come with more advanced features, such as the ability to block downloading and copying (a huge no-no) or even showing documents on a screen that cannot be screenshotted. Many use industry-leading encryption to scramble sensitive data and multi-factor authentication to ensure that the user trying to log in is actually the one requesting access.

Most secure datarooms permit users to download PDF files for offline viewing. However, if you allow users print these files on physical printers or let them save them to file drivers for other reasons, they will not be protected that is given to the original data within the virtual data room.

If you are able to download these files from a data room or other system and then view them without connecting to the Internet that defeats the purpose of using data rooms to store sensitive documents for M&A due diligence, litigation, compliance and other documents that are sensitive. The documents should be stored on devices, and not sent to servers. We recommend a DRM-based system which locks documents onto devices rather than servers. This means that it is impossible to remove them from devices and then share them.

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